VIO News Blog

August 20, 2008

Economic Growth Continues, Cement Companies Go National

Venezuela’s Central Bank shows economic growth of 7.1 percent during the second quarter of 2008, reports the Associated Press today. Non-oil related GDP continues to rise at the fastest rate by 7.8 percent, while oil-related GDP grew 3.2 percent. Communications and construction showed the largest expansion at 24.6 percent and 11.7 percent respectively. In related news, Oil Minister Rafael Ramirez said that if there appears to be a trend in the decline of oil prices, “Venezuela would have to analyze the possibility of a production cut.” He made the remarks while talking about an upcoming OPEC meeting which Venezuela will attend next month.

In other economic news, the Los Angeles Times covers the negotiation process between foreign cement companies operating in Venezuela and the government, as a two month long negotiation period draws to a close. Although, French and Swiss companies have agreed to new terms and will sell a majority stake of their companies to the Venezuelan government, Cemex, a Mexican owned operation, failed to come to an agreement with Venezuela. Cemex asked for roughly $1.3 billion in compensation, which Venezuela deemed excessive. Despite this, Venezuela took control of the operation yesterday and will pay “fair value for the firm” according to Venezuela’s energy minister, Rafael Ramirez. The government plans to utilize the cement companies in a national project to build homes for the poor.

Finally, the South African press reports that President Chavez will visit South Africa in early September on the invitation of President Thabo Mbeki. According to the Venezuelan embassy there, the visit is scheduled to take place between September 2-3 and aims to bring closer cooperation between the two nations and the creation of a bi-national commission.

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